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Cement demand rode the crest in the past two years, but pricing growth eluded the industry. It was only in February 2019 that prices finally caught up. Cement makers pulled off hefty hikes, especially in the south and east, setting the stage for the industry to log margin expansion for the first time in 10 quarters.
But just as things were falling into place, there is an all-pervading gloom in the economy. Will it play spoilsport? Specifically, will the price hikes sustain amid worries of waning demand, especially in the first half of fiscal 2020?
There are questions on the supply side, too. Incremental capacity outpaced incremental demand by 1.3 times in the past five years, weighing on utilisation. Also, the largest player in the sector consolidated its presence by acquiring 47 million tonne of stressed/ under-utilised capacities, further burdening the industry’s utilisation. The sector is staring at grinding supply pipeline of 90-100 MT in the next 3-5 years. That will necessitate healthy demand growth, if utilisation has to remain respectable. Meanwhile, clinker utilisation is peaking, with a few regions facing clinker availability issues. Will India turn to clinker imports in the long run?
If you are a lender, investor, or stakeholder, it thus becomes critical to get a grip on the goings on in the sector.
CRISIL’s one-day programme promises to arm you with the granular insights you are looking for. Don’t miss the opportunity.
What will you learn about?
Long-term trends in the domestic cement sector and how these relate to various macro-economic factors
Evolving role of institutionalisation in the sector
Is east the new south? Regional demand-supply nuances, coupled with inbound-outbound
Raw material issues in new limestone mine auctions and elevated clinker utilisation
Evolving fuel mix, the shift towards pet coke, upcoming domestic pet coke shortage, and its impact on profit
Pricing trends at regional level
Profitability outlook by player category
Emerging trends in the sector such as coastal packaging units, clinker imports, cement exports, and rising cement blending
Consolidation
Credit risks associated with the sector and impact of consolidation on sector dynamics
